Yamal LNG production begins

The Yamal liquefied natural gas (LNG) liquefaction plant has started production, with the first LNG cargo export scheduled for 8 December.

The Christophe de Margerie tanker, named for the former Total CEO. Photo from Somcovflot.

The Russian government on 29 November granted permission to OAO Yamal LNG to commission the LNG plant’s first stage, including its first liquefaction train, 58 gas wells, and associated infrastructure. The first LNG train has a design capacity of 5.5 MTPA.

Located on the Yamal Peninsual north of the Arctic circle, the plant will be fed by gas from the South-Tambeyskoye field. The project is being built in three phases, with remaining scheduled startups in 2018 and 2019. Yamal LNG is expected to produce 16.5 MTPA of LNG and up to 1.2 MTPA of gas condensate, which will be delivered to European and Asia Pacific markets.

The first LNG cargo will depart from the Sabetta port using the first Arc7 ice-class LNG tanker, Christophe de Margerie, Yamal LNG partner Novatek reported today (5 December).

Despite challenging conditions, Yamal LNG was delivered on time and on budget. “This is unusual in the LNG industry, where the exports often experience cost overruns or delays,” said Samuel Lussac, senior research manager, Russia Upstream Oil & Gas, Wood Mackenzie.

The facility’s low cost upstream base makes it competitive in the near-term global LNG oversupply, Lussac said. However, risks associated with Yamal LNG’s performance and logistics remain, such as the plant’s ability to smoothly operate in the harsh Arctic environment. The Northern Sea Route transportation also is in the early stages of development, and its feasibility as a major LNG delivery route is unclear.